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Tadmax Resources to rely on energy business to stabilise growth
Wednesday, June 27th, 2018
at , Business | News

By KEVIN WONG / Graphic By TMR

Tadmax Resources Bhd is confident its venture into the energy sector will be a stabilising factor and help cushion the cyclicality in the property sector.

“As we are entering the energy sector, we will have a concession period of about 20 years, of which we will have a stable income for the company in the future,” Tadmax Resources ED Datuk Noel John said yesterday.

Noel said Tadmax’s decision to venture into the energy sector is due to the cyclical nature of the property sector.

“There are so many property developers in the country and the industry is possibly not as great as it used to be. What’s more now that the government is emphasising more on low-cost and affordable housing.

“So, developers are required to build low-cost (houses) first and hopefully get profits from the medium and upper-end projects to subsidise the affordable ones,” he said.

Noel added that the group has invested about RM25 million in its energy business and garnered the support of three bankers to develop and operate a 1,000MW-1,200MW combined cycle gas-fired power plant in Pulau Indah, Selangor. The plant is slated to commence operations in 2023.

“At the same time, we have partnered Korean electricity giant Korea Electric Power Corp (Kepco) as our technical partner for the power plant,” he told The Malaysian Reserve after the group’s AGM in Kuala Lumpur.

Kepco is South Korea’s largest state-owned public utility company with US$147 billion (RM615.9 billion) of assets, in which 51% of its shares are owned by the South Korean government.

Noel said that the group’s main driver of growth will continue to be in the property development sector, followed by industrial supplies and agriculture development.

“Following the group’s ‘kitchensinking’ exercise last year, we hope our two major properties in Kepong and Labuan would see some positive contributions by the third quarter of 2018.

“Both Mizumi Residences (Kepong) and affordable housing in Ganggarak (Labuan) have an estimated gross development value of RM98 million,” he said.

Deputy MD Datuk Aldillan Annuar announced that the group will be handing over 520 units this year and another 260 next year.

“We have about eight acres (3.24ha) of undeveloped land as far as our property sector goes,” he said.

The group, he said, is always looking to acquire more land within the Klang Valley to develop affordable housing as it is the group’s market segment.

“However, there is nothing in the pipeline as we are currently focusing on both developments in Kepong and Labuan, which will keep us busy for the next two to three years,” he said.